Spillenger on Choice of Law Jurisprudence, 1865-1940

This paper examines the developments leading to the establishment by the U.S. Supreme Court in the 1930s of constitutional limitations on choice-of-law rulings by state courts. Prior to the Civil War, the jurisprudence of conflict of laws did not even acknowledge, much less adopt, the possibility that such constitutional limitations existed. Since the rules of decision applicable in antebellum private-law litigation were largely drawn from common law and other non-municipal sources of law, there was little basis for invoking the Full Faith and Credit Clause as a limitation on state courts' application of lex loci principles. The key development in altering this conception was the enactment, beginning in the 1850s, of state statutes altering or creating rules of decision for certain kinds of civil litigation. These statutes, of which the wrongful death acts and the later employers liability laws were the most important, were largely directed to the problem of risk of catastrophic injury and loss in an increasingly industrial society. State courts confronting the multi-jurisdictional problems raised by these statutes concluded that they could not be applied "extraterritorially," i.e. to injuries incurred outside the forum. This assertion, which was based not on the Constitution but on more general principles concerning the sovereignty of states, was conceived as a limitation on legislative or "political" jurisdiction rather than a doctrine belonging to "conflict of laws" as such. The Supreme Court showed little interest in the issue of extraterritoriality until some states, notably Missouri, began to enact state regulations protecting local policyholders from forfeiture provisions in the life insurance policies issued by the major insurers in the Northeast. The Court in 1914 and 1918 struck down as unconstitutional the application by Missouri courts of these local protective statutes to insurance agreements deemed to have been "made" outside of Missouri. Thus a proscription of extraterritoriality, married to the then-prevailing doctrine of liberty of contract, briefly entered the law of the Constitution. These principles concerning extraterritoriality, based as they were on the formalist notion that only one state has regulatory authority over a given event or transaction, were undermined by the widespread enactment of workers' compensation laws. In the three 1930s cases considering the legitimate scope of such compensation statutes, Justice Stone (building on earlier opinions authored by Justice Brandeis) decisively affirmed the authority of a state to apply its workers' compensation statute to injuries suffered outside the state. At a stroke, these decisions interred the idea that only one state has regulatory authority over a given event or transaction; eliminated the relevance of extraterritoriality as a touchstone for constitutional analysis of state authority with respect to multi-jurisdictional transactions; and provided crucial support for an emerging model of conflict of laws in which state interests - most notably, a concern for state domiciliaries - supplanted territoriality per se as the principal consideration.